Are Some Sustainable Businesses Buying Less ‘Green?’
Yes, I am quite certain some very good “green” companies are indeed buying fewer green products. However, despite some recent reports to the contrary, I don’t believe it is because green is dying or losing steam. In fact, the people we are fortunate to work with seem every bit as committed as ever and are constantly looking for new ways to improve in terms of sustainability as well as reducing their carbon and water footprints without adding cost to their operation.
I also doubt the departure from green is an intentional effort to deceive or stray from previous green values, but a result of a combination of two distinct factors:
- The economy – considering the long, dismal economic state we have all been suffering through, any effort to reduce cost is justifiable.
- Inexperience – in many cases the decision to not buy green is due to basic procurement inexperience combined with inaccurate perceptions and/or misinformation.
We’re All in the Same Economic Boat
The reason we can relate so well to new, green businesses, especially green startups, is because we are one. Even though we are on the verge of celebrating our fifth anniversary we took our lumps during that time period and are far from being immune to the financial pressures affecting all of our businesses including increased (green washing) competition, cash flow, credit availability, etc. Unfortunately in the last few years we have witnessed the demise of many new, small green businesses so we fully understand that the difference between survival and closing your door may be just a few margin points.
How Our Own Inexperience Can Hurt Us
Most green entrepreneurs, including my wife/partner and me, are not MBAs, nor do we offer a resume full of experience owning and operating a business. Most of us are simply passionate people with an overwhelming desire to make a living and do some good for the environment in the process.
Combine an unforgiving economy with a lack of business experience in key areas such as sourcing, purchasing and calculating costs, and the end result is often costly mistakes that worsen a financial situation rather than improve it. Our missteps feed our problems and our problems seem to perpetuate our missteps.
Based on our own mistake-riddled experience as both a seller and buyer of green products, we offer the following suggestions:
Don’t Assume ‘Sustainable’ Is More Expensive
When we do, we fall into the same trap that we all accuse many of our potential customers of falling into. It is sad when potential customers inform me they can’t justify buying green, before they even know the pricing for comparison. The green prospects assumed we would be higher than a non- or less green option. The fact is that in most of those situations, we would have substantially reduced their overall packaging costs if given the opportunity and an open mind.
Communicate with Your Supplier
Whether you are buying copy paper or candles, don’t give up and switch to a lower cost but less green option without at least discussing it with your green vendor. There are often things we can do to further reduce a client’s cost when they are forthright and say, “I like the product but I need a lower cost.” For example, in many cases a slightly larger purchase quantity can result in dramatic savings. There are many other areas such as shipping and terms where costs and prices can be easily reduced.
Keep in Mind Labor Is Our Greatest Expense
Small business owners (me included) are notorious about not considering or appreciating our most precious resource which is our time. For example, I have met people who are understandably focused on cost of a particular void fill product while spending an enormous amount of time using it. It is not unusual for a customer to achieve dramatic and substantial labor savings with a small change and perhaps only a slight increase in material cost.
Understand the Difference between Price and Cost
We may buy a product by the roll, case, bundle, etc., but we use it by the application. After years in the packaging industry I can tell you some products are intentionally designed to be wasteful and deceptive in terms of usage and cost. Another example from the packaging world I know is biodegradable pallet wrap film. Others may offer a lower “cost per roll” but because their product cannot be elongated as much, pallet loads being shipped are less secure and actually have a much higher cost. It’s not how we buy it (price), it’s how we use it (cost) that really matters.
Value Suppliers Who Bring You New Green Ideas
The green world is changing on an almost daily basis and it is difficult to stay on top of the many innovations that are constantly being introduced. Chances are a “non-green” supplier is not going to be able to keep you aware of market industry changes. If you identify a good, green vendor able to keep you up to date, hang on to them, because what is the cost of becoming a follower rather than a leader in your specific green market?
Don’t Ever Believe that You Have “Outgrown” Green Supplies and Suppliers
I find it ironic that green companies grow to a point where they seriously start thinking that their needs are too great for green suppliers to handle. I can only hope that their customers don’t feel the same way.
In addition there is an acknowledged drop-off of green passion as staffs grow, and new personnel additions are likely not as passionate about sustainability as the original company founders or launching team. The blame, however, may not all rest on the new buyer that was just hired. People do what you pay them to do, not what you ask them to do. So if your compensation or bonus program rewards only cost reduction, don’t be surprised if green becomes suddenly far less important.
If We Don’t Support Sustainable Businesses, Who Will?
This final point is not about guilt, it is about common sense and being consistent. The green market we serve is skeptical and longs for authenticity. Thanks to the internet, our sincerity or lack of it can quickly become public and widespread knowledge.
In addition to being the right thing to do, supporting sustainably minded businesses is also the smart thing. When one green business fails, the market is weakened and loses credibility as non-believers note and sometimes celebrate the demise. On the other hand when one succeeds, we all gain a strong ally in the uphill battle none of us can afford to lose.
Dennis writes in the area of sustainable packaging with his work appearing in numerous blogs and magazines, including his own blog, Inside Sustainable Packaging. Dennis and his company provide custom eco friendly packaging solutions through Salazar Packaging and stock green packaging products via GlobeGuardProducts, which is the first internet store featuring all eco-friendly packaging supplies. Recently Dennis also made news by launching GreenPackagingGroup, which is a B2B packaging blog and directory for eco-minded buyers. He is president and co-founder of Salazar Packaging.
Energy Manager News
- Quality Power, Not Just Power, Should be the Goal
- Siemens Unveils Microgrid-as-a-Service Platform
- 18 Buildings Going Solar in D.C.
- ERC: Electricity Price Trends for the Week Ending Feb. 5
- At QER Roundtable, EPSA Recommends Competitive Pricing Improvements
- EPA Undeterred by Supreme Court’s Delay of Clean Power Plan
- Lux: Google, Amazon Emissions Claims Inaccurate
- FIU Again Tops in Energy Efficiency